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George Washington. Winston Churchill. Jeffrey Skilling. Don't laugh. Until the past year, many management consultants, executives and business journalists lionized Enron's former CEO as a paragon of leadership similar to our first president or Britain's WWII icon.

Today, Skilling is more often compared to Ivan Boesky or Charles Ponzi, and investors, creditors and politicians are screaming for his head. But management experts say the vociferous anger over Enron, Tyco and other corporate implosions masks a subtler yet more serious concern. Simply put, does this series of scandals indicate that corporate America--both small businesses and large corporations--has forgotten how to define and discover outstanding leaders? More broadly, have Americans in general lost sight of the qualities that make up the finest leaders?

Only16%
of parents want their children to become CEOs.Source: Harris Interactive

Answering this question will help determine the fate of the small and large business worlds, which have lost the trust of many Americans. Discovering answers is not an impossible task; in fact, some management experts believe the scandals and economic downturn have provided a rare opportunity for America to redefine its views on leadership.

Turning on the Charm
Many executives believe businesses' current problems can be linked to one fatal flaw: the idea that charismatic leaders are best able to manage companies from Fortune 500 firms to mom-and-pop stores. Rakesh Khurana, an assistant professor at Harvard Business School who researches corporate leadership, believes Americans have always had a soft spot for charismatic leaders, a consequence of our founding ideology as a nation of rugged individuals. And he does not deny that charisma is a vital component of some leaders' personas, especially in professions like politics where public speaking is important.

A whopping87%
of all adults believe that most top company managers are paid more than they deserve.Source: Harris Interactive

"The aftermath of September 11 has shown that a president still has to be able to rally people," says Daniel Pink, author of Free Agent Nation (Warner Books) and former speechwriter for Al Gore. Pink notes that though President Bush is not considered a polished public speaker, many people nonetheless looked to him to deliver rousing oratory in the wake of the terrorist attacks.

Though charisma can be important, over the past decade too many businesses have sought out ultra-charismatic "superstar" leaders to the exclusion of other types of personalities. In fact, the rate at which U.S. companies replace their top leaders has skyrocketed since 1990, as firms search for supposed miracle workers from outside their organizations. In the early 1980s, several self-promoting saviors did rescue companies--Lee Iacocca at Chrysler, for example--and their successes led corporate boards and family businesses to overrate charisma. What's more Khurana says, some boards believed charismatic leaders were better-equipped to communicate the company's vision to impatient investors and the increasingly voracious business media. Meanwhile, small and large companies began relying on executive search firms, a change that made it harder for leaders to advance from within companies.

Yet many leadership experts believe these supposed superstars often deliver poor leadership and weak long-term results. In a study of 1,435 companies' performance over four decades for Good to Great (HarperBusiness), author Jim Collins found none of the firms that did best changed leadership frequently or relied on charismatic saviors. Anecdotal evidence supports Collins' research. Michael Armstrong arrived as AT&T's chief executive in 1997 and quickly nabbed the covers of many business magazines before leaving his post in 2002. But despite making several high-profile acquisitions, Armstrong failed to improve AT&T's financial results during his tenure as CEO. At Enron and Tyco, charismatic leaders were able to use employees' reverence to amass enormous amounts of power, which they used primarily to enrich themselves.

The Leadership Connection

Given the excesses wrought by some of these supposed saviors,
executives, small-business organizations and management experts are
rethinking the nature of superior leadership. This downturn
"actually is the best time to rediscover what makes a great
leader," says Subir Chowdhury, author of The Power of Six Sigma (Dearborn Trade),
a bestselling book on leadership development. "Because the
whole exonomy is weak, there is less short-term pressure on
companies to perform, so companies can take time to reassess which
aspects of leadership are more important to them." Indeed,
many of America's most entrepreneurial companies, such as
Microsoft, were started during recessions. Leaders had time to
identify their core beliefs without having tons of cash thrown at
them, a development that can cloud leaders' thinking.

Management experts are now examining leadership qualities other
than charisma. "It is time to focus more on what I call,
'connective leaders,' leaders who do not demand that
everyone adheres to their vision but can tolerate a diverse range
of viewpoints," says Jean Lipman-Blumen, professor of
organizational behavior at the Peter F. Drucker Graduate School of Management
in Claremont, California.

"We are increasingly being confronted with a globalized
environment where you have to work with a wider range of people and
opinions," Lipman-Blumen explains. "Leaders who can
connect to a broad group of folks will be the most
successful."

Look to the Masters

Who better to serve as your
inspirational leaders than Edison and Franklin? Learn more about
them in the following books:

According to Collins, such connective leaders are more likely to
be self-effacing, empathetic corporate insiders. Many have risen
through their organizations over long periods of time, marinating
themselves in company culture and developing long-term
relationships with employees. Unsurprisingly, says Kay Koplovitz,
founder of USA
Networks, a small business in New York City that blossomed into
a major cable channel, "if you went through America's
biggest companies and the most profitable small businesses, you
would see most develop their leadership from within."

Though self-effacing chiefs may not seek the limelight, they are
hardly shrinking violets. Collins argues that most of these
connective leaders possess significant reserves of will, and they
use this grit to make tough decisions. He notes several examples of
this quiet/tough duality, including Abraham Lincoln, who was a shy
but not a weak man--he unleashed the Union Army to hold the country
together. Collins also cites Darwin E. Smith, former chief
executive of paper products company Kimberly-Clark. Though
reserved, Smith made crucial decisions, choosing to close down the
company's profitable paper mills and focus more on
Kimberly-Clark's consumer business. Though unpopular at first,
this choice paid off, as paper milling became less profitable and
Kimberly-Clark grew to dominate the consumer sector. And
Smith's reserved style allowed him to shine the spotlight away
from himself and on his employees during these changes, earning
their enduring respect.

Often, these leaders forged their grit and decision-making
capability during what management guru Warren Bennis calls
"crucible experiences," pivotal events that crystallize
leaders' thinking and unleashing their abilities, making them
realize they can rally people behine them. "Everyone has a
crucible experience sometime in life, but only great leaders learn
from them, rather than just having the experience and moving
on," say Chowdhury. Often, these crucible experiences involve
loss or suffering, the kind of event that helps leaders relate to
employees. Collins notes that Ulysses S. Grant's own battles
with alcoholism helped him understand some of his soldiers'
personal failings, making him a fairer and more understanding
leader. What's more, Grant's own problems and his
willingness to acknowledge his weaknesses made him human to his
soldiers.

Business schools are beginning to consider crucible experiences
so important in shaping effective leaders that they are helping
students face crucibles even before they graduate. Michael Useem,
director of the Wharton Center for Leadership and Change, has begun
taking MBA students on Himalayan treks, where the future
entrepreneurs have the opportunity to push themselves to their
physical and mental limits, making their senses more receptive to
mini-crucible experiences. "Trekking near Everest and having
to make decisions that could be life-or-death really drives home
leadership concepts that can be hard to appreciate in class,"
says Useem.

These quieter, more connective leaders also may be more tolerant
of failure, another factor crucial to successful leadership
that's only now beginning to be discussed. "A great leader
encourages his or her employees to innovate and to fail repeatedly
so they will ultimately discover great things," says James
Belasco, executive director of the Financial Times Knowledge Dialogue, an
international panel of leadership experts. "He or she does
that by readily admitting their own failures and talking about them
openly."

Lipman-Blumen agrees: "In America, we love leaders who say
'I take responsibility for a failure; now let's move
on.' but it's worthless to just move on." Instead,
Lipman-Blumen says, successful leaders "talk about the failure
and allow everyone to see they've made a mistake, and [they]
learn from it."

Some of America's most successful executives have followed
her advice. L.D. DeSimone, former CEO of 3M, the diversified
technology company, frequently told employees that he had at first
nixed the development of Thinsulate, which turned out to be one of
3M's bestselling products, an admission that made his staff
more willing to try and fail. "The best leaders learn how to
get to the top without going over the cliff," says Useem.
"They learn how to fail without imploding, and when inaction,
which is not valued highly enough in business culture, might be
better than quick action."

Doing What's Right

No matter how outgoing or introverted they are, Useem says, in
America's crowded and chaotic corporate climate, quality
leaders also focus on "making their words stick"--not
only delivering messages, but also ensuring they resonate with
employees, especially on issues related to ethics. Using symbols
can be crucial to making words stick and to defining corporate
culture. After taking over Salomon Brothers in the early 1990s, a
period when the financial firm was consumed by scandal, savvy
investor Warren Buffett gathered Salomon employees together.
Buffett announced he was appointing himself as chief compliance
officer, gave all employees his home phone number, and told them to
call if they saw examples of malfeasance at work. Buffett was not
expecting hundreds of calls, but that statement signified he would
make his words stick, and that ethics would be much more than just
a corporate motto, explains Useem.

Learning From Enron

What other lessons can you
take away from the recent corporate debacles of Enron, Tyco, et al?
How about:

Creating an ethical, well-defined corporate culture also allows
superior leaders to lure the types of employees who will perpetuate
high ethical standards. "Everyone is cynical now about what
corporate leaders say," says Chowdhury. "If you can make
employees feel that they have a shared destiny in the company, you
can get the best people, people who are coming because of the
company's vision and who will share their innovations with the
company." Indeed, a survey conducted by research firm Robert
Starch revealed more respondents would take a lesser-paying job at
Ben & Jerry's, a company with an image of allowing
employees to share in its destiny, over a higher-paying job at
Procter & Gamble.

Book It!

Find Valuable Leadership
Lessons Within the Pages of These Literary Gems.

Scrolling through the business section of Amazon.com, you might
find hundreds of how-to books on successful leadership. But most management
specialists believe history tomes, biographies and other books that
don't directly advise people about leadership provide more
worthwhile reading. Some books
recommended by experts and executives include:

Into Thin Air (Anchor Books): Jon
Krakauer's account of a failed 1996 attempt on Mount Everest
that ended in the deaths of several climbers. Michael Useem,
director of the Wharton Center for Leadership and Change, believes
Into Thin Air succinctly summarizes some of the issues
leaders face--when to act or not, how to operate in a hostile
environment, making your words stick--and illustrates the
potential consequences of poor
leadership.

The Guns of August (Ballantine
Books): Several leadership experts cited Barbara Tuchman's
history of how Europe blundered into the First World War as a
volume that gives tips to leaders about the value of obtaining the
best information, remaining self-effacing and not allowing
pride to dominate
decision-making.

Jack: Straight from the Gut
(Warner Books): Though the star of former General Electric CEO Jack
Welch has dimmed, his autobiography still shines as inspiration,
says Subir Chowdhury, author of The Power of Six Sigma
(Dearborn Trade). Chowdhury believes leaders of small and large
businesses can learn by reading Welch's response to his own
crucible experiences, which
included growing up with learning disabilities.

There is, however, one exception to this rule. Many experts
swear by The Practice of Management
(HarperBusiness), a 1954 book by management guru Peter Drucker that
remains relevant today and contains lessons on empowering
employees, tolerating and encouraging innovative failure, and other
key leadership attributes.

Looking Ahead

Though some executives and management experts think the current
era offers a perfect chance to reassess leadership, many believe
that nasty old traits still remain. "Despite all the problems
and scandals, American leaders are still too reactive, not
proactive enough," says Chowdhury. "When I counsel
executives, too many say that they will deal with a problem or an
ethical issue if it comes up, rather than putting control systems
into place now."

Other experts argue that the myth of the charismatic leader
continues to plague corporate America and the country in general.
"Business is cyclical, and once the economy turns up again, we
will probably see a celebration of overly aggressive leaders
again," says Lipman-Blumen. Still others believe that, despite
the downturn, too many leaders of small and large businesses do not
tolerate failure or seek out mentors who could help them deal with
failure. "Having a mentor is absolutely critical, because you
need someone there, outside the main structure of your company, to
listen to your problems and provide realistic advice," says
Koplovitz.

But perhaps the biggest problem, many say, is that the wave of
scandals has made Americans so cynical that promising executives do
not receive the support they need to blossom into terrific leaders.
"Americans now are more realistic about what leaders can do,
which is good," says Chowdhury, "but if you lose your
hope in leadership, then you will never have the popular support
that really great leaders must draw on."

Got What It Takes?

If you want to follow the
footsteps of great leaders, you have to:

Be able to communicate with a wide
audience. Successful modern leaders can communicate
their message and style to a diverse range of employees. "In
the old days, businesses developed a 'company man' who was
like a carbon copy of other employees," says Jean
Lipman-Blumen, professor of organizational behavior at the Peter F.
Drucker Graduate School of Management in Claremont, California.
"But today, the work force is incredibly varied, and a leader
has to deal with hundreds of types of 'company' men and
women."

Be willing to make unpopular
decisions. Communicating with your employees does not
mean you always have to please them. A successful leader sometimes
has to make unpopular decisions. Jim Collins notes that
Lincoln's decision to use force to keep the country together,
and to enact martial law in many areas, was very unpopular with
many segments of the public.

Be determined to make sure your
messages get through. A successful leader does not just
define a vision for his or her company and then communicate it in a
few statements. "Whatever definition you are giving to your
company, whatever direction you want to lead it in, you have to
make sure your employees internalize what you say," says
Michael Useem, director of the Wharton Center for Leadership and
Change. "Make your words stick."

Create and implement quality systems
and methods that will survive. "Many people can be
great leaders of a company, but then they spend no time worrying
about succession or leaving any systems in place for when they
retire or leave," says Subir Chowdhury, author of The Power of Six Sigma (Dearborn Trade),
a leadership guide. "Then what will happen after you are
gone?"